ASEAN KEY DESTINATIONS
Malaysian companies should seize on strengthening currencies
In a statement Wednesday, the research house said those local companies which derive income mainly from domestic or regional sources, but have US dollars, euro and British pound denominated liabilities or costs, stand to benefit.
It also highlighted that on the other hand, local companies which export to the United States and Europe, as well as those with overseas operations in these countries, would be affected by the strengthening ringgit.
"Asian currencies, including the ringgit, are supported by robust domestic economies, improvement on exports and selective money tightening, vis-a-vis the U.S. dollar and European currencies," it said.
The ringgit has to-date, surged 7.1 percent against the US dollar, and at the same time, climbed against the euro and British pound to 18 per cent and 13.5 per cent respectively.
ECM Libra said the increase against the US dollar, the euro and British pound, is mainly due to the structural issues in these economies such as high unemployment and fiscal deficit, which have taken a toll on their respective currencies.
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